Review of Arkansas's Reporting of Medicaid Overpayments Collected by Contractors

EXECUTIVE SUMMARY:

Our objective was to determine whether the Arkansas Department of Health and Human Services (the State agency) reported overpayments collected by contractors in accordance with Federal requirements.  The State agency did not report overpayments collected by contractors in accordance with Federal requirements during the period October 1, 2000, through April 30, 2005.  Specifically, the State agency did not report $3,657,402 ($2,732,897 Federal share) in overpayments and did not report $6,575,449 ($4,858,415 Federal share) in overpayments in a timely manner.  Also, the State agency did not report the did not report Federal share of any interest earned on funds held in the cash holding account. 

We recommended that the State agency:  (1) include the $3,657,402 in unreported overpayments on the CMS-64 and refund the $2,732,897 Federal share; (2) determine the Federal share of any interest earned on the $10.2 million that was held, or still may be held, in the cash holding account and refund that amount on the CMS-64; and (3) adhere to its written procedures for clearing cash holding accounts to ensure that all future overpayments are reported in accordance with Federal requirements.  The State agency agreed with our recommendations.